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Introduction to the Business Planning: Taxation exam

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Published: 21 Sep 2021 Update History

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In this guide we will introduce you to the Business Planning: Taxation exam. We will cover what the Business Planning: Taxation exam is, what to expect when sitting the exam, what to look out for and preparing for the exam.

Introducing the Business Planning: Taxation exam

The exam is 2.5 hours in length and is structured as follows:

Q1 – 40 marks
Q2 – 35 or 30 marks
Q3 – 25 or 30 marks

The exam is 75% based on skills and 25% knowledge. This means it is how you apply your knowledge to the scenario in the question which is important rather than simply regurgitating a rule. This is an open book exam, meaning you can use any printed materials you like – course notes, study manual, question bank, your own notes etc. However, do not let this lull you into a false sense of security. The exam is highly time-pressured, and you will not have the time to look things up constantly. The pass mark is 55%.

What to expect when sitting the exam

The questions generally require a written response, often with accompanying computations. It is often tempting for accountants to ignore written elements and only produce numbers, but this strategy will always fail. You need to explain complex concepts in clear, jargon-free terms which a non-specialist will understand. Each question based on a scenario involving multiple taxes. One is likely to involve a large corporate group, another a smaller owner-managed business and the third more biased towards personal tax. Unlike Tax Compliance we never know which question will focus on which area. The questions will be broken down into sub-requirements, but we will not be given a mark allocation. One of the skills you will need to develop is knowing which sub-requirements are more important and therefore where to allocate your time most effectively. 

The questions can be very lengthy with multiple exhibits providing much of the information.

What to look out for

To date, exams have generally followed a pattern which includes:

  • How to structure a business (unincorporated or incorporated)
  • The tax implications of an incorporation (especially the choice of reliefs available)
  • How to extract profits from a business in the most tax-efficient way
  • The venture capital schemes available to smaller businesses
  • Groups (including consortia which is new to you at this level)
  • International aspect of both personal and corporate tax
  • Anti-avoidance for small and large businesses
  • Large corporate reorganisations (including hive-downs and management buyouts)

All questions will involve discussion of a range of taxes. You must read the questions carefully, some will specify exactly WHICH taxes to discuss, others will simply say discuss THE tax implications. In this latter case think broadly and don’t forget things like national, insurance, VAT and stamp duty.

Preparing for the Business Planning: Taxation exam

You firstly need to become familiar with the syllabus – for many this will be a tuition course. Feel free to make some notes of your own, but do not spend too long doing this – a few one-page summaries of key topics should suffice. Then you need to get into the questions. Start with the self-test questions in the study manual and then progress to the exam standard questions in the ICAEW question bank.